DEFINITE PROGRESS

Manawatu Standard, Volume LIII, Issue 288, 2 November 1933, Page 6

DEFINITE PROGRESS

ON RESERVE BANK BILL. CABINET UNYIELDING. (By Telegraph.—Special to Standard). AVELLINGTON, Nov. 2. Twelve clauses of the Reserve Bank of New Zealand Bill had passed the ordeal of Committee discussion when the House of Representatives adjourned at 0.25 this morning. This ensures beyond question—because the amendments were usually rejected by a majority of at least twenty —that the clauses providing for the bank’s establishment, its capital and the definition of its object will become law in the original form. Many efforts were made by Labour members to have passed amendments which would have made the bank purely a State institution. They endeavoured to eliminate private shareholding, also the references to shareholders’ powers. The Leader of the Opposition (Mr M. J. Savage) in emphasising the desire for a State bank, declared that there was no intention of putting its administration into the Cabinet room. “All we ask for,” he said, “is that this should be a State institution which should not be limited to shares.”

This principle, as enunciated in a Labour amendment, was rejected by 43 votes to 23. Mr Samuel supported Labour’ 9 State bank amendment.

The Government’s attitude, as defined by ltt. Hon. G. 4V. Forbe3 in simple terms, was that “if you were running a shop you should not antagonise your customers.” The Reserve Bank was a bankers’, bank, and the Government desired it to start with the immediate confidence of the banking and commercial community, and it was the private shareholding interest that engendered this. The critics, having failed to eliminate the shareholders, became concerned to restrict them to New Zealanders, and in this connection Rt. Hon. J. G. Coates made the only concession during the sitting. He undertook to examine the position to see if there was sufficient power to exclude undesirable shareholders. The allocation of shares and their transfer were subject to the approval of the Finance Minister, but if that was inadequate he would have the clause redrafted.

The progress made thoroughly satisfied the Ministers, who were' particularly pleased. The short title was not debated, as feared, for many hours. Shortly after midnight all matters relating to the bank’s capital and establishment had been adopted without amendment, and a new phase arose on the clause defining the general object and purposes of the Reserve Bank. Its primary duty is to exercise control over monetary circulation and credit in New Zealand to the end that the economic welfare of the Dominion may be promoted and maintained. Mr H. G. R. Mason introduced an amendment directing that the monetary system should be based on goods and services, and that the value of the bank’s note issue be expressed in terms of wholesale prices of New Zealand-pro-duced commodities and shall remain stable. This was negatived by 43 votes to 26.

The best vote the Opposition obtained was 27 on the private shareholding question. The Committee resumes this afternoon.